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Market Wrap-Up for Oct.14 (HON, BRCM, MAT, MCHP, SLB, GE, more)

In a week where there likely numerous traders set up waiting to
profit from a move lower after last week's spike, the market failed
to cooperate with the bears and the gains were sharp once again.
The one risk to the rally (and it is a red flag when it comes to
measuring the strength of the gains) is the moves are coming on low
volume.

These type of sharp rebounds are why I never liked doing much on
the short side in my days as a trader. Stocks can sometimes rally
on no news and as a short-seller you need to have the gumption to
either buy to cover and close a position or short more on the
rallies. That's certainly a tough game when trying to fight the
tendency of Wall Street analysts putting buy calls out on the
majority of the stocks they cover. Yet there are plenty of
short-sellers who don't mind the fight.

Getting back to today's action, positive Wall Street analyst
calls on shares of Broadcom (
BRCM
), Honeywell (
HON
), and Rockwell Automation (
ROK
) had all three companies' shares nicely higher. Oil-service
related plays like Halliburton (
HAL
), Schlumberger (
SLB
) and Baker Hughes (
BHI
) ran up as oil prices rose once again, gaining over $11 a barrel
in the last week. Ironically, transport stocks didn't seem to mind,
as many of the names we watched also gained. On the flipside,
earnings results/guidance for Mattel (
MAT
) and Microchip Technology (
MCHP
) had both those companies' shares closing lower. Overall it was a
big rebound week for the recently slaughtered commodity sector.

Gaining an Edge and Losing Credibility at the Same Time

There was a big story out a couple of days ago alleging Wall
Street Journal Europe may have been channeling money through
European companies in order to secretly buy thousands of copies of
its own paper, thus misleading readers and advertisers about the
paper's true circulation. Advertising is a tough gig for many
companies already when it comes to trying to build or maintain a
brand. Unfortunately when money is at stake, shortcuts will often
be taken. Everywhere you turn theses days, you hear about
questionable practices and metrics being used to justify companies
spending their hard-earned dollars. There are services you can use
to buy followers on Twitter, friends and "likes" on Facebook, and
traffic to your website. When it comes to the publishing world, I
have heard plenty of stories about publishers gaming the New York
Times best-seller list with bulk buys in the first few weeks of a
book's release. It's pretty pathetic, but it happens.

I truly believe that you can try all the tricks and play with
all the numbers as much as you can, but in the end, only the
highest quality products and services will have the staying power
to provide something of real value. The long tail of success will
give you plenty of chances to take a short cut. My simple advice:
don't take it.

China Seeing More Scrutiny

More stories about the deteriorating state of the Chinese
economy continue to hit the headlines. The real estate bubble there
has apparently popped in many areas over the last few months, and
things could get pretty dicey as far as the global fallout is
concerned. With China's government funding much of the recent
build-out, there is increased risk of how the central powers will
respond to things spiraling lower. It's possible the country could
try and save face, basically painting a rosy picture as the old
Soviet Union used to do back in the 1950′s-1970′s (eventually the
real picture in the U.S.S.R. trickled out and major revelations
came to shape).

Copper prices have been dropping strongly over the last couple
of months and many point to this trend as evidence China's growth
engine has begun to stall. Besides commodities, China is the
biggest investor in U.S. debt. What will happen to interest rates
if China floods the market with treasuries? A sudden spike in
interest rates would certainly create a huge obstacle to any hopes
of a real estate recovery.

So you see why there is increased focus on how China can
maintain its current course of growth. The question of whose
economic policy is to blame for any further global economic
pressures could be a big point of contention in coming months and
years between the U.S. and China. We are certainly paying attention
to what the ramifications can be when it comes China's situation as
it affects one's investment portfolio and what dividend stocks
would be best to own if things do indeed get dicey.

A Look to Next Week and a Weekend Preview

Looking ahead to next week, quarterly earnings will be
super-heavy, with several big names slated to post their latest
reports. We will see results from the likes of Wells Fargo (
WFC
), Coca-Cola (
KO
), Johnson & Johnson (
JNJ
), General Electric (
GE
), and plenty of others.

Be sure to catch up with our latest watchlist updates this
weekend on
Dividend.com Premium
, including reports on earnings/story stocks, analyst
upgrades/downgrades, dividend ETFs, and much more. And as always,
you can view our current recommendations on our industry-leading
Best Dividend Stocks List
.

Thanks for reading, and I'll see this weekend! P.S. Please pass
this e-mail on to someone you think can use some financial
motivation as well as being kept in the financial news loop that
could affect them.

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